Government incentives may have helped Volkswagen AG eclipse Toyota as the world’s best selling carmaker in the first quarter of 2009.

Demand for VW products in the major markets of Germany, China and Brazil (which, combined, account for half of all VW groups sales) has been fuelled by government incentives encouraging people to buy new cars.

If it pans out that VW has usurped Toyota as the world’s best selling manufacturer, then it is a feat that has remarkably been achieved on the back of an 11 percent fall in sales for the Wolfsburg-based conglomerate.

Even with falling sales, the VW group has managed to increase its share of the global passenger vehicle market to a healthy 11 percent. Of course, VW’s dominance in a market that is a ‘mere slip’ of its early 2008 self, means that other manufacturers are hurting disproportionately.

Toyota’s latest shipping estimates for the 2009 first quarter are 47 percent down on the same period in 2008. In fact, Toyota has watched sales of its products in China (its third largest market) fall each month this year.

It really looks like a case of being in the right markets at the right time for VW.

"Volkswagen has the luck of being strong in the markets that are currently growing, while Toyota is exposed to those that are collapsing," said Ferdinand Dudenhoeffer, head of the Centre for Automotive Research in Gelsenkirchen, adding the quarter's results would be "close".

The Volkswagen group, consisting of nine brands including Volkswagen, Audi, Skoda, Seat and truckmaker Scania, has set a goal of toppling Toyota from the world’s best sellers podium in 2018.

Market researcher R.L. Polk has forecast that VW will exceed GM's volumes in 2009, having overtaken Ford’s in 2008.

VW has also been successful in gaining greater control of weak markets like Russia, which despite a 39 percent contraction in overall demand for new vehicles, has seen Volkswagen grow its volume by 14 percent, making it the fourth-largest manufacturer in the country.

Toyota is expected to disclose its worldwide first-quarter vehicle sales this week.